Interim Report January – September 2015
»» Net profit increased by 66 per cent to SEK 1,482 million (892), corresponding to SEK 1.35 (0.81) per ordinary share.
»» Income increased by 8 per cent to SEK 2,013 million (1,863).
»» The operating surplus increased by 8 per cent to SEK 1,333 million (1,238).
»» Profit from property management increased by 32 per cent to SEK 786 million (594).
»» Changes in value of properties amounted to SEK 1,084 million (880). After taking possession of 15 properties for SEK 1,199 million, divestment of 14 properties for SEK 543 million and investments of SEK 852 million the value of the property portfolio amounted to SEK 32,800 million.
»» The adjusted equity ratio improved to 36.4 per cent.
Statement by the CEO
Good profit development
Profit continued to develop well during the third quarter with profit from property management increasing by 28 per cent. Market conditions are favourable in the form of a robust state of the economy and historically low interest rates. Hand in hand with this, the transaction market continues to be strong, as reflected in rising property values although this also means that it is important to be selective when making acquisitions. At the same time, there is a great potential for long-term creation of value in project activities at a number of the growth locations where Klövern has a leading position.
A favourable rental market combined with acquisitions led to an increase in income of 4 per cent during the quarter. Good cost control including successful long-term work on improving energy efficiency, contributed to the operating margin being 69 per cent. Although net moving-in was slightly weak during the quarter, after nine months we are not so far from the goal for the full year of a net moving-in of at least 1 per cent of the rental value, and conditions are good for the last quarter of the year. Further down in the income statement the favourable level of interest rates is reflected in a
continued improvement in net financial items.
The property portfolio continued to increase in value as a result of both acquisitions and positive changes in value. In a strong transaction market, it is important to be selective about additions to the portfolio. We reject considerably more properties than those that we go on to endeavour to acquire. During 2015, we have primarily strengthened Klövern’s position in Stockholm and Gothenburg by acquisitions of high quality properties with solid well-known tenants. Not least Solna Gate – with tenants such as Santander, BP, Bristol-Myers Squibb and GlaxoSmithKline. The same applies to the property Inom Vallgraven 15:2, centrally located in Gothenburg with Swedbank as its largest tenant.
In all, Klövern has 5.000 tenants in a broad spectrum of industries, geographically distributed over a number of growth locations. This mix, together with almost every fifth krona of income coming from public sector activities, creates stability.
Stability on the income side provides in turn the prerequisites to develop the business through projects. In the next few years, it may very well be the case that our project operations will be the single largest creator of value for Klövern. At present, we have over 300 ongoing projects with a total
investment volume of over SEK 3 billion. Among the largest projects are Tele2’s new head office in Kista and construction of Elite Hotels’ new landmark hotel at the central station in Uppsala. At the same time, in a structured way, we continue to focus on how changed local plans can create opportunities both for new offices and housing, sometimes through infilling, to create even more attractive urban environments. One example of a planned coming project is the property Sigurd 7, also known as S7, at the central station in Västerås. As recently as last week, we submitted planning applications for an exciting new modern building encompassing around 8,000 sq.m. of lettable area. Another project, which is closer in time, is Skeppet in Karlstad, a roughly 14,000 sq.m. large office and retail property in the best location at the city’s inner harbour.
Overall, we are satisfied with the development in the third quarter and the prospects look favourable for a good conclusion to the year.
For additional information:
Rutger Arnhult, CEO, +46 70-458 24 70, firstname.lastname@example.org
Lars Norrby, IR, +46 76-777 38 00, email@example.com
Klövern is a real estate company committed to working closely with customers to offer them efficient premises in Swedish growth regions. As of 30 September 2015, the value of the properties totaled SEK 32.8 billion and the rental value on an annual basis was SEK 3.1 billion. Klövern is listed on Nasdaq Stockholm. For further information, see kelly.corem.se.
Klövern AB (publ), Bredgränd 4, 111 30 Stockholm. Phone: +46 8-400 500 50. E-mail: firstname.lastname@example.org.
This information is such that Klövern AB (publ) is obliged to disclose under the Securities Market Act and/or the Financial Instruments Trading Act. The information was made available for publication on 22 October 2015.